This paper investigates what lessons may be learned from Europe's convergence process of the 1990s. The paper challenges the conventional focus on labour market institutions and 'structural rigidities' as the root cause behind Europe's poor employment record. Instead, it is argued that macro...

The stability-oriented macroeconomic framework established in the Treaties on European Union, especially the unparalleled status of independence and peculiar mandate of the European Central Bank (ECB), were promised virtually to guarantee price stability and a strong euro. Shattering these hopes...

Conventional wisdom blames Germany's ongoing economic and fiscal crisis on the unification shock of the early 1990s and structural problems in labour markets. Challenging this view, this paper offers a fresh assessment that focuses on macroeconomic demand management. It is shown that Germany's...